The Joint Committee on the Budget voted on Thursday (11) the report from Deputy Jorge Khoury (DEM-BA) with the second estimate on the 2009 income. The text reduced the forecast for next year’s federal collection in R$ 10.6 billion, excluding transferences to states and municipalities.

That drop is mainly due to the retraction of economy, a reflex of the global financial crisis upon Brazilian market. Khoury reduced the growth forecast on the 2009 Gross National Product from 4% – the percentage that had been presented by the government in November – to 3.5%.

Thus, the primary net income for next Budget was estimated in R$659.6 billion. That is the amount that effectively is kept by the Union. The fist income report, approved by the Committee in October, had forecast the primary collection in around R$ 670.2 billion.

Final cutback
The drop of R$ 10.6 billion in the income is not the indication of the cutback, which should be done in expenditures. Its final amount is not known, since it depends on the fulfillment of new demands by the general-rapporteur on the Budget, Senator Delcídio Amaral (PT-MS).

The ruralist caucus, for instance, wants to double the appropriation for the program on agricultural-price guarantee, which has received R$1.52 billion. If the senator wants to direct more resources to this goal, he will have to make more cutbacks in other areas of the budgeting bill.

The final amount of the cutback and the presentation of the final report will depend on negotiations of that kind. Delcídio informed only that the reduction in expenditures should be higher in funding expenses and lower in government investments that are not included in the Growth Acceleration Program (PAC).

Reduced tax collection
The presented report shows that the drop in economic activity in 2009 will reduce income from taxes, which had been generating expressive gains for the Treasury in the last two years, such as Income Tax on corporations and Social Contribution on Net Profit (CSLL).

The opinion also forecasts a drop in the collection of royalties from the oil and natural-gas exploitation in Brazil. Those royalties are paid by the exploiting companies to the Union, to the states and to the municipalities; their amounts are linked to the price of the oil barrel in international market, which has been dropping since the deepening of the global crisis.

“At the moment when the government elaborated the proposal, it had no idea on the dimension of the crisis. The economy is about to slow down”, explained Jorge Khoury. According to him, the decision to decrease the growth forecast from 4% to 3.5% is not backed up by the government, which still bets on a resuming of the economic activity along next year. The deputy, though, said that his commitment was to make a report that would be closer to reality and to economy forecasts.

Report - Janary Júnior
Editing- João Pitella Junior
Translation - Positive Idiomas Ltda